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1 What Is the Economy? If we are to believe the evening TV news, our lives are dictated by the state of the economy. Our fortunes rest with how well governments manage the economy and how much scope businesses are given to grow the economy. Economists have become the soothsayers of the modern world, predicting what will happen as interest rates rise and fall, currencies are valued and devalued, and export and domestic markets expand and contract. The economy, it seems, is an ordered machine that governs our lives. It’s even a machine whose interactions have been captured in working models. At the end of the nineteenth century, Irving Fisher designed and constructed a mechanical model of the economy using a system of water tanks, levers, valves, and pipes. By adjusting the spigots and water levels he could model the impact of economic changes, including falling or rising consumer demand and increased or decreased money flow. Since then, economists have continued to tinker with machines and models to demonstrate the mechanics of economic interaction. One of the most famous machines was built by New Zealand economist Bill Phillips (of Phillips curve fame) in 1949.1 The Monetary National Income Analogue Computer, or MONIAC, made its debut at the London School of Economics. Long before computer simulations could do it mathematically, the machine used water to mimic how money flowed through the British economy. By closing valves and pulling levers, the 1. Reframing the Economy, Reframing Ourselves 2   reframing the economy, reframing ourselves god-economist-operator could see the impact of interventions such as raising or lowering interest rates. Around fourteen copies of the machine were built and sold to institutions that included Harvard, Cambridge , and Oxford Universities; Ford Motor Company; and the Central Bank of Guatemala. This image of the economy as a machine has prevailed throughout the twentieth century. The major actors are business entrepreneurs and investors who make products, profits, and wealth; the banks that adjust interest rates; and governments that slow down or hasten growth by exacting and spending tax revenues. Everyday people are included as income earners and consumers—generators of demand with appetites that need to be satisfied. The machine is seen to operate best if it is largely left to its own devices . Interventions by concerned citizens, unions, environmentalists, and even governments pose a threat to its smooth and well-oiled operations . Importantly, these types of interferences are thought to jeopardize the growth mantra that drives this machine to greater and greater outputs. The image of the economy as a machine has been so robust that even at the beginning of the twenty-first century, economists such as Jeffrey Sachs merrily declare, “The wonderful thing about markets is they self-organise. You don’t really have to do very much. You turn a couple of dials and the whole national economy changes. . . . You can sit in a finance ministry or a central bank and make tremendous progress for a whole economy.”2 Notice Sachs’s confidence that progress automatically flows if the machine is minimally guided by an economist-operator. But is this confidence well founded? Increasing numbers of people have grave concerns about how this machine economy operates. It has a voracious and unsatisfiable appetite for natural resources. It is largely oblivious to the consequences of industrial production as it pumps out greenhouse gas emissions and other environmental pollutants that destroy the health of our ecological commons. It pays no regard to the widening gap between those with excessive material wealth and those with so little that bare survival is difficult. And it appears to have no way of regulating the destructive greed and gambler habits of its financiers—those tasked 3   reframing the economy, reframing ourselves with oiling and priming its key valves and spigots. For all the ease with which Fisher, Phillips, and Sachs might claim to be able to manipulate and adjust their levers and dials for the greater good, these intractable problems remain. The more we go along with the idea that the economy is an engine that must be fueled by growth, the more we are locked into imagining ourselves as individual cogs—economic actors only if we work to consume . But there are many other ways that we contribute economically. Clearly we do not live in a machine that is controlled by turning dials and adjusting valves. But there is work to do to fully reject the idea that the economy is a machine and recognize...


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